“Personal insolvencies continue to head in the right direction but financial pressures are still huge for the average man on the street.”

Meanwhile, credit reference agency Experian, found ‘middle-class suburbanites’ saw the biggest increase in their share of UK insolvencies last year.

According to the agency’s figures, this group – which includes mainly married or middle-aged people, with children, accounted for 10.93% of personal insolvencies – up from 10.37% in 2010.

Simon Waller, head of Customer Management and Collections for Experian UK and Ireland, added: “Whilst it is encouraging to see that personal insolvencies are declining throughout the UK, there are still pockets of society where financial stress has increased in 2011.

“Redundancy and relationship breakdown are typically the main reasons for why people to experience serious financial difficulties.”

According to money charity Credit Action, the average household debt – not including mortgage payments – was some £7,900 in December 2011.